Grab to invest $250 million in Indonesian startups in race against Go-Jek

JAKARTA (Reuters) - Grab will invest $250 million in Indonesian startups over the next three years through its newly launched innovation arm, as the ride-hailing firm aggressively pushes to cement its position in the Southeast Asia’s largest economy.

A Grab motor driver is seen in a street in Jakarta, Indonesia, February 13, 2017. REUTERS/Beawiharta

The Singapore-based firm has raised $2 billion in funding in recent months and also launched the Grab Ventures arm to develop technology start-ups in sectors beyond ride-hailing as it locks horns with Indonesia’s Go-Jek for regional dominance.

“We are looking at startups in both series A and B, which we could integrate into our ecosystem,” Ridzki Kramadibrata, managing director for Indonesia, told Reuters.

The company, which counts Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp among its backers, has already starting looking at startups and will start funding rounds later this year, he added.

Grab is interested in healthcare and food-and-grocery delivery startups as well as those that facilitate digital payments and automated processes, he added.

Grab’s rival Go-Jek has already evolved from a ride-hailing service to a one-stop app allowing Indonesian clients to make online payments and order everything from food, groceries to massages. It is now looking to expand in Southeast Asia, to Vietnam, Thailand, the Philippines and Singapore.

Kramadibrata said Grab is currently the top ride-hailing player in Indonesia and that he was confident the firm would be able to maintain the lead. The firm is valued at around $11 billion, according to sources.

“We hold 65 percent of (Indonesia’s) ride-hailing market, as based on total rides and transactions,” said Kramadibrata. “And it won’t stop there, our market share is increasing.”